Bridge the Giving Gap
In most mid-size to large nonprofit organizations, there are two distinct areas from which revenue is generated from individual donors. The names vary: Membership hands off to development; direct marketing supports major gifts; marketing feeds donors to advancement.
In each situation, one group is dedicated to generating broad-based support via a bevy of direct-response techniques. Another very separate group raises large or major gifts utilizing relationship-based techniques. The impact of this structure is, in most cases, a siloed system that doesn’t make it easy for staff to transition donors — and a jarring experience for the donors themselves.
Professional fundraisers on either side of the divide spend their time developing techniques and processes to increase the value of fundraising efforts — independent of what the other group is doing. Too often there is little or no collaboration between the two. And this is unfortunate because the ideal donor-lifecycle model would have these two groups working together to move donors up the giving ladder from first gift to ultimate gift in a strategic and systematic, yet personalized, way.
Increased competition and changing expectations from donors require fundraisers to work harder at creating a deeper, more cohesive relationship for donors, particularly those who have raised their hands to indicate a great capacity or propensity to support our causes. Mid-level programs are an important element in a smooth donor transition from smaller gifts to larger commitment. Mid-level giving allows us to bring the best of both worlds to bear in crafting strategies for this emerging donor group. Mid-level donors are those donors who bridge the gap between the often divergent worlds of direct response and major gifts. These donors are ready to make a deeper commitment to their cause and need to move beyond traditional direct-response vehicles as a mechanism for support. However, they are not quite ready for — nor do they yet require — the intense, one-on-one relationship and staff resources that major-gifts cultivation offers.
As many organizations look toward creating more donor-centered and mission-oriented experiences for more committed supporters, there are three areas of focus that are key to building successful mid-level giving programs.
Appropriate audience selection
Using some variety of RFM to select donors for direct-response efforts is a proven technique for donor segmentation. But for mid-level donors, organizations might need to dig a bit deeper into their donor pool to determine who is best suited for these efforts. Truly understanding the nature of your donor file is important. Organizations should look at their sources of donors and the offers that bring them in. Are they members or donors? Are they motivated initially by disasters or other episodic factors? What demographic or psychographic information is available?
Understanding who is on your file and why they joined you and continue to provide support will help you to move beyond RFM to select those donors best suited for the special efforts of a mid-level program.
Donors who are primed for the mid-level program can include those with higher previous contributions, very high cumulative giving amounts or wealth-indicator scores, or those who are a part of the monthly giving program and also give additional gifts above and beyond their monthly donations. Remember that mid-level donors can look very different in each organization, so it’s important to test a group’s performance within the mid-level program and also to continually measure and evaluate the types of donors included in your mid-level giving program.
Catholic Relief Services, a premier sustained development organization that raises the majority of its support through direct channels, recently did just that. When creating its mid-level giving program, it originally identified five different source groups for inclusion, taking into account the different types of gifts it receives. After one year of mid-level treatment, CRS found that four out of the five original source groups performed significantly better with the additional mid-level treatments. The fifth group didn’t respond any differently to the treatment than it had to the traditional direct-response program and was migrated back into the general donor pool.
Message depth and approach
While increasing your investment in direct-mail production — through nicer stocks, closed-face envelopes and postage — can help improve mid-level efforts, distinct package treatments should be considered as well. This means integrating the best of the “personalized” world of major gifts with the improved production technology available in direct response. Live handwriting, oversized and highly personalized carriers, and specialized treatments such as paper-clipped business cards and personalized folders can have enormous impact with these valuable donors. Even more important than the look of the package is the appropriate message. Donors who are ready to make this more substantial financial commitment to an organization need deeper and more substantial messaging about your work and the impact of their gifts.
Kathy Swayze, president of Impact Communications, who works with many organizations seeking to provide more compelling messages, refers to this as moving individuals in mid-level programs “from donors to investors” by telling more in-depth stories, providing mission-related content and writing to them at a higher educational level. These longer letters provide more in-depth descriptions of programs and, with the rest of the package, can be used to build a solid case for giving. For mid-level donors, direct-response techniques are combined with the depth of messaging found in the in-depth proposals used by major-gift officers.
In addition, appropriate messaging also means taking a look at the proper balance of cultivation and solicitation that mid-level donors receive. Balanced cultivation is more than simply sending an acknowledgment after a gift. Donors at this level should receive targeted cultivation mailings — with a very soft ask or no ask — in order to continue to deepen their commitment and explain their vital role in the organization’s work. Cultivation pieces can include invitations to events, progress reports on program areas of interest to mid-level donors or announcements about an award your organization has received.
Though no direct ask should be included, there are some times when a return envelope makes sense. For instance, if an item, such as an ornament or card for a service recipient, is included for the donor to sign and return, a convenience envelope should be included. No reference is made to a gift request, but many donors will return a gift of support and may, in combination with the gifts of other donors, pay for your costs to do the cultivation mailing.
Establishing measures of success
Because mid-level giving programs are hybrids of direct-response and major-gifts efforts, the way in which you measure them also is a hybrid of these two areas. There are both hard and soft metrics that can be used to evaluate the performance of a mid-level giving program.
Hard metrics measure the movement of donors through the donor pipeline. Of course, mid-level donors should be evaluated on their performance in individual direct-response campaigns to measure traditional variables such as response rate, average gifts, net/thousand and ROI. However, we also need to carefully monitor other, less immediate measures such as their LTV, cumulative giving within a year, the number of donors who upgraded and the retention rate of donors within the mid-level program. Organizations also can measure the number of donors who migrated out of the program and into major gifts as prospects — after all, that’s the goal of these mid-level efforts!
Soft metrics — those more qualitative measurements of the success of the program — also should be looked at when evaluating the mid-level program. Because this program serves as a bridge between direct response and major gifts, fundraisers should look at the interdepartmental collaboration fostered by the mid-level program. How are both groups working together to increase the effectiveness of the mid-level program? Are resources being shared? Have any preexisting issues of “donor ownership” been improved upon or alleviated? What do staff relationships look like? How smoothly is donor migration managed?
Just as importantly, fundraisers should listen to their donors in these programs. Direct-response fundraisers tend to discount anecdotal feedback when it’s received from the large pool of donors — it’s not “statistically significant” and can’t be used to make decisions about the traditional program. However, anecdotal feedback from the smaller, more focused group of mid-level donors can function as the direct line to your donors — and their hearts. Increased opportunities for two-way communication can create additional cultivation and bring these high-value donors even closer to the mission.
Cathy Finney is associate vice president at MINDset Direct.